Authored By : Mookerjee, William Teunon

Mookerjee, J.

1. This rule was granted upon an application under OrderXLI, Rule 5 of the Civil Procedure Code of 1908, for stay of execution of thedecree of the Court below. At the time the rule was issued, the Court also madean order under sub-rule (4) of that rule for stay of execution pending thehearing of the application. The circumstances under which the application hasbeen made may be briefly narrated. Maharani Beni Prasad Kuari of Dumraon diedon the 13th December 1907. The plaintiff, Kesho Prosad Singh, alleges that twodays later, he was evicted from the Raj estate, though he was the rightfulowner thereof, and on the 16th December 1907 the Court of Wards declared aninfant Jung Bahadur Singh, now known as Maharaj Kumar Srinivasa Prosad Singh,as the owner thereof and took possession of the Raj on his behalf. On the 5th February1909, Kesho Prosad Singh commenced an action in the Court of the SubordinateJudge of Shahabad for declaration of his title, for recovery of possession ofthe Dumraon Raj estate, for accounts and mesne profits and for incidentalreliefs. The suit which was valued at three crores of rupees was broughtagainst the infant Jung Bahadur Singh alleged to have been adopted by the lateMaharani under an authority from her husband Maharaja Sir Radha Prosad Singhthe Collector of Shahabad, as representing the Court of Wards, and the managerunder the Court were also joined as defendants. The claim was strenuouslyresisted on behalf of the defence and after a protracted trial, extending overmany months, a decree was made in favour of the plaintiff on the 12th August1910. The operative part of the decree is in the following terms: "Theplaintiff Babu Kesho Prosad Singh, being the Lawful heir of the Dumraon Raj isentitled to recover possession of all the properties appertaining thereto andthe defendant should make over peaceful possession of the same. He is furtherentitled to the reliefs prayed for in the plaint. The Court of Wards is liableto render accounts of all moneys, moveables and immovables, of which it tookpossession at the time of its assumption of the charge of the estate. It isfurther declared to be liable for mesne profits and other benefits for theperiod the plaintiff is kept out of possession, that is, from the date ofdispossession up to the time he is restored to possession. The plaintiff shallbe entitled to all his costs from the Court of Wards with interest up tillrealization." On the 8th September 1910, the infant defendant, representedby his guardian under the Court of Wards, and also the Collector of Shahabadappealed to this Court against the decree of the Subordinate Judge and obtainedthe rule now under consideration as also the interim order for stay ofproceedings to which reference has been made. The rule first came to be heardbefore my learned brother Coxe and myself on the 4th December 1910. Thematerials then before the Court were the petition upon which the rule had beenissued, verified on 7th September 1910, and the affidavit of theplaintiff-respondent Kesho Prosad Singh sworn on the 1st December 1910. Afterelaborate arguments, the petitioners obtained an adjournment to enable them toconsider what security they might offer under Order XLI, Rule 5 sub-rule 3Clause (c), if the Court felt disposed to make an order for stay of execution.The rule came on for further arguments on the 19th December 1910. Meanwhile,the petitioners had adopted, what must be regarded as an unusual and irregularcourse. On the 15th December 1910, they filed an affidavit which was ostensiblyan affidavit in reply to that filed by the respondent Kesho Prosad Singh on the1st December 1910, but which in reality introduced new matters to supplementthe allegations in their original application. Thereupon, Kesho Prosad Singh onthe 19th December 1910 filed another affidavit in which he protested that theaffidavit filed by the petitioners on the 15th December 1910 was irregular andought not to be accepted. Kesho Prosad Singh also contradicted variousallegations made in the second affidavit filed by the petitioners. The rule wasthen further heard before my learned brother Coxe and myself on the 19thDecember 1910. But as the petitioners were not ready to make a definite offerof security they obtained another adjournment. The rule then came to be heardby my learned brother Teunon and myself on the 4th January 1911 when thepetitioners offered as security what was described as a guarantee by theSecretary of State for India. The case was then further adjourned to enable theAdvocate-General to be heard as amicus curix on behalf of the Secretary of Statefor India. Full arguments were addressed to the Court on the 17th and 18thJanuary by the learned Advocate- General and by learned Counsel on behalf ofthe decree-holder respondent and the judgment-debtors-appellants. On behalf ofthe decree holder, it was contended that the rule ought to be discharged,first, because upon the materials placed before the Court, there was no proofthat substantial loss might result to the appellants unless an order for stayof execution was made, and secondly, because the security offered was notlegally enforceable, and at any rate, its validity was open to such grave doubtthat it ought not to be accepted as a good security for the purposes of stay ofexecution. The learned Counsel for the decree-holder further contended that thepetitioners had acted in an entirely irregular manner, as it was not open tothem to place on the record what was essentially a supplemental affidavit afterthe hearing had commenced and the matter had been adjourned to enable theappellants to consider whether they could comply with the requirements of theCode in the matter of security. On behalf of the judgment-debtors petitioners,it was contended that substantial loss would result to them if execution wasnot stayed and that the guarantee offered furnished adequate security for theprotection of the decree-holder in the event of his ultimate success. On behalfof the Secretary of State for India, the learned Advocate-General, as amicuscurix, further contended that the guarantee offered on his behalf was amplesecurity and its validity could not be questioned in a Municipal Court. Thequestions raised are of some novelty and by no means free from doubt anddifficulty. The Court has consequently taken time to give the fullestconsideration to the arguments advanced on both the sides.

2. Order XLI, Rule 5 of the Code of 1908 provides insub-rule (1) that an appeal shall not operate as a stay of proceedings under adecree, except so far as the Appellate Court may order, nor shall execution ofa decree be stayed by reason only of an appeal having been preferred from thedecree, but the Appellate Court may for sufficient cause order stay ofexecution of such decree. Sub-rule (3) next provides that no order of stay ofexecution shall be made under sub-rule (1) unless the Court making it issatisfied, (a) that substantial loss may result to the party applying for stayof execution unless the order is made; (b) that the application has been madewithout reasonable delay, and (c) that security has been given by the applicantfor the due performance of such decree as may ultimately be binding upon him.

3. Each of these three elements is an essentialpre-requisite to the grant of an order for stay of execution and it is the dutyof the Court to satisfy itself that each of these conditions has been fulfilledbefore an order is made in favour of the judgment-debtor. In the present case,no question arises as to the second element; the application was made verypromptly, in fact, even before the decree-holder could make an application forexecution of his decree. The question, therefore, is restricted to the othertwo elements, and they may be separately considered.

4. The first question is, whether the petitioners havesatisfied the Court that substantial loss may result to them unless the orderis made. Gaikwar v. Ghandi 25 B. 243. Here it cannot be disputed that thepetitioners have adopted an irregular course. The affidavit upon which theyapplied for a rule is not sufficiently specific. This appears to have beenrealised after the hearing of the rule had commenced on the 2nd December 1910,and an attempt was consequently made to import new matter in the supplementalaffidavit filed on the 15th December 1910 as an affidavit in reply Strictlyspeaking, the matter ought to be decided upon the petition verified on the 7thSeptember 1910 and the affidavit in answer sworn on the 1st December 1910. I donot desire, however, to base my decision upon what may bear even the semblanceof a technical rule of procedure, and, I shall, therefore, take intoconsideration the materials furnished by all the four affidavits. When thestatements in the petition are analysed they reduce to this, that theplaintiff-opposite party is a man of small means, that he has carried on thelitigations with the aid of borrowed capital furnished by speculators, that ifhe obtains possession, restitution may be impracticable, and that theascertainment of the mesne profits may be difficult and protracted. This issupplemented by the stereotyped allegation that if proceedings are pot stayed,irreparable injury will result to the appellants. The plaintiff-respondentchallenges all these allegations. In his affidavit of the 1st December, hestates that he is prepared to furnish ample security for restitution, and thatit is untrue that he has carried on the litigation with the aid of speculators,though he has been obliged to borrow money to defeat the unfounded claim of theCourt of Wards who had at their disposal all the resources of the estate forover three years. He further asserts that the income of the estate is noteleven lacs a year as stated by the petitioners but sixteen lacs a year asstated in official papers, but that whatever the precise income may be,practically the whole of the income has been spent by the Court of Wards duringthe three years that the estate, has been in their charge, besides cash to aconsiderable extent of which the Court of Wards took possession upon the deathof the Maharani. In the so-called affidavit in reply, filed on the 15thDecember 1910, the statement of Kesho Prosad as to the income is disputed. Anattempt is also made to justify the expenditure of the income during the threeyears that the estate has been in the possession of the Court of Wards. Statementsthen are made in the four concluding paragraphs of the affidavit as to thedifficulty that may result if the management is changed, and reference is madeto settlement proceedings and numerous suits for rent now pending. A suggestionis also faintly made that the decree holder, if allowed to obtain possession,may levy Nazaranahs, harass the tenants and make improvident settlements. Thefinal affidavit of Kesho Prosad Singh, filed on the 19th December, makesvarious allegations of improvident management and reckless expenditure duringthe years that the estate has been in the possession of the Court of Wards, andit cannot be seriously doubted that even if a fraction of these allegations istrue, the management of the estate has not been above criticism. This, however,is a matter upon which the Court is not called upon to form a definite opinionat the present stage of the proceedings. The point for determination now is,whether the appellants have satisfied the Court that substantial loss mayresult to the infant unless execution is stayed. After anxious considerationand scrutiny of the materials placed before the Court, I have arrived at theconclusion that the question ought to be answered in the negative. As alreadystated the decree-holder offers to furnish security for restitution if an orderfor execution is made in his favour. If such security is furnished, it isdifficult to appreciate how substantial loss may result to the appellants. Theessence of the complaint of the petitioners is that the decree-holder is a manof limited means and that if he be permitted to execute his decree, restitutionwill be impossible. This is effectively met by the decree-holder when he offersto furnish security to the satisfaction of the Court for restitution, before heobtains an order for execution. The allegation that the ascertainment of mesneprofits may be difficult is wholly unsubstantial. The appellants have now beenin possession of the estate for over three years, and they may be assumed to beintimately acquainted with its condition. If, therefore, the decree-holder isallowed to execute his decree after he has furnished security for restitutionin the event of reversal of the decree of the Court below, thedefendants-appellants may be expected to be able to prove without difficultythe amount of profits actually receivable from the Estate. The learned Counselfor the judgment-debtors-appellants has, however, contended that the estatemight be wasted and injured if placed in the possession of the decree-holder,who might not improbably oppress and harass the tenants of this extensiveestate. I confess, speculative considerations like these do not carry anyweight with me. The decree-holder claims the property as his own; he hassuccessfully conducted a protracted and expensive litigation to assert hisrights; why should he, as soon as placed in possession, begin to waste theproperty; if he makes improvident alienations pendente lite the transfereeswill be bound by the result of the appeal. On the other hand, there isconsiderable force in the argument of the learned Counsel for the decree-holderthat as under the management of the Court of Wards during three years, thewhole of the income has been spent,--it is immaterial whether such income istaken to be eight or twelve lacs a year--and as the savings made by the lateMaharani to the extent of nearly eight lacs of rupees have also disappeared,the estate could not very well fare worse in his hands than it has done underthe management of the Court of Wards. I am, therefore, not able to appreciatewhy the decree-holder should be kept out of the fruits of his decree, if he isprepared to furnish security for restitution. The policy of the Legislature inthis matter is obvious from the provisions of the Code; that policy is that thedecree-holder is to be allowed to reap the fruits of his decree, unlesssufficient cause is established for stay of execution. It may be conceded thatin many cases where, upon presentation of an appeal to this Court, an applicationfor stay of execution is made on the allegation that substantial loss willotherwise result to the judgment-debtor, the decree-holder does not challengethe truth of the allegation and is very often content to allow execution to bestayed if sufficient security is furnished. Where, however, as here, thedecree-holder challenges the allegation of possible substantial injury to thejudgment-debtor, it is the duty of the Court to scrutinize the matter. Thisview is strengthened by an examination of the history of the legislation onthis subject, as reviewed in my judgment in the case of Tribeni Sahu v. BhagwatBux 34 C. 1037 (SC) : 11 C.W.N. 1030 : 6 C L.J. 298. By Sections 12 and 14 ofRegulation V of 1793 and Sections 10 and 12 of Regulation VI of 1793, in thecase of an appeal against a decree for the possession of land, thejudgment-debtor could, as a matter of right, obtain stay of execution uponfurnishing security, and in the case of all other decrees, the Court could, inits discretion, either stay proceedings and take security from thejudgment-debtor or allow execution and take security from thejudgment-creditor. This policy, however, was abandoned as early as 1859 andfrom the provisions of the Code of 1908 which are applicable to the case beforeme, it is clear that the judgment-debtor cannot obtain an order for stay ofexecution, unless he has satisfied the Court that substantial loss mightotherwise result to him. To put the" matter briefly, it is competent tothe Court, to accomplish the ends of justice, to allow execution to proceed andtake security for restitution from the judgment-creditor under Rule 6 or stayexecution and take security from the judgment-debtor under Rule 5. For eachalternative, however, the burden is upon the judgment-debtor to show sufficientcause. In the circumstances of the case before us, sufficient ground, in myopinion, is not shown for stay of execution of the decree, whether we confineour attention to the allegations in the original petition or take them along withthose contained in the supplemental, affidavit of the 15th December 1910. Theconclusion follows that the first element essential for grant of stay ofexecution has not been established.

5. The second question arises in connection with Order XLI,Rule 5 sub-rule (3) Clause (c) of the Code of 1908. That clause provides thatno order for stay of execution shall be made unless the Court making it issatisfied that security has been given by the applicant for the due performanceof such decree as may be ultimately binding upon him. Now, in the present case,there are two applicants, the infant represented by his guardian who is managerunder the Court of Wards and the Collector of Shahabad who represents the Courtof Wards. It is stated that the infant has no property of his own except theDumraon Raj Estate, the title to which is in controversy. The Collector ofShahabad also, who represents the Court of Wards, has no funds at his disposalas representative of the Court of Wards. Neither of the applicants, therefore,is able to furnish security as required by the Code. The learned Counsels ontheir behalf have consequently intimated to this Court, that they are able tofurnish a bond executed by the Chief Secretary to the Government of Bengal forand on behalf of the Lieutenant Governor of Bengal in Council for and acting inthe premises for and on behalf of the Secretary of State for India in Council.The guarantee offered is in the following form.

6. To the Registrar of the High Court of Judicature at FortWilliam in Bengal in its Appellate Jurisdiction.

7. This security bond in stay of execution of decree,executed by the Secretary of State for India in Council witnesseth:

That in Title Suit No. 29 of 1909 in the Court of the 2ndSubordinate Judge, Shahabad, wherein Kesho Prosad Singh is plaintiff and (1)Maharaj Kumar Srinivasa Prosad Singh, minor, of the Court of Wards, Bengal, (2)The Collector of Shahabad and (3) Captain, J.B. Rutherford, Manager, Court ofWards, are defendants; a decree was made on the 12th August 1910 declaring theplaintiff to be entitled to the properties forming and known as the Dumraon Rajin the District of Shahabad, and directing the defendants to make overpossession to the plaintiff of the said properties and directing the Court ofWards to pay the costs of the suit and further directing the Court of Wards toaccount to the plaintiff for all properties moveable and Immovable taken chargeof by the Court of Wards in December 1907 as on behalf of the defendant No. 1and of the profits arising therefrom since that date and to arise therefromuntil the date of possession given to the plaintiff.

The defendants Nos. 1 and 2 have preferred an appeal to thisCourt from the said decree in the said Suit No. 29 of 1909 which appeal isstill pending. Now the defendants Nos. 1 and 2 have made an application prayingfor stay of execution and have been called upon to furnish security.

Accordingly, I, the Secretary of State for India in Council,stand security and covenant that if the said decree of the Court, of the 2ndSub-Judge, Shahabad, be confirmed or varied by the Appellate Court, the saiddefendants shall duly act in accordance with the decree of the Appellate Courtand shall pay whatever may be payable, by them there under and if they shouldfail therein, then I, Secretary of State for India in Council, will be liableto pay the same.

In witness, the hand of Chief Secretary to the Government ofBengal for and on behalf of the Lieutenant Governor of Bengal in Council, forand acting in the premises for and on behalf of the Secretary of State forIndia in Council, this day of January one thousand nine hundred and eleven.

8. The learned Counsel on behalf of the decree-holderinquired whether this guarantee was proposed to be given by the Secretary ofState in Council with the concurrence of a majority of votes at a meeting underSection 40 of Statute 21 and 22 Victoria, Chapter 106. The learned Counsel forthe judgment-debtors-appellants could not furnish any information on thesubject. The learned Advocate-General, who appeared as amicus curix on behalfof the Secretary of State for India, declined at one stage to give anyinformation in the matter; but when the Court intimated to him that theguarantee would not be considered, unless the Court was satisfied that therequirements of the Statute have been strictly observed, the learnedAdvocate-General put in a copy of the following telegram dated the 31stDecember 1910 from the Secretary of State for India to His Excellency theViceroy.

Your telegram dated 22nd December. Dumraon Estate. Isanction security being furnished by Government of Bengal to the extentrequired by High Court Judicature for stay of execution pending final decisionon appeal. I sanction also your proposal as towards maintenance and provisionof funds for prosecuting appeal.

9. The learned Counsel for the decree-holder then contendedthat the guarantee ought not to be accepted substantially for two reasons;namely first, that it was not shown to have been given by the Secretary ofState for India in Council with the concurrence of a majority of votes at ameeting; and secondly, that even if the provisions of Section 40 of theGovernment of India Act 1858 were shown to have been strictly followed, theguarantee was ultra vires, because it was not a contract for the purposes ofthe Government of India within the meaning of Section 2 of the Statute, and wasgenerally in excess of the authority delegated by the Crown to the Secretary ofState for India in Council. In answer to these contentions, it was argued bythe learned Advocate-General that it was not competent to any Municipal Courtto determine the validity of the guarantee, that if a Municipal Court has suchjurisdiction, it ought to refrain from an inquiry into the validity of theguarantee, because once the guarantee has been given the Secretary of State forIndia in Council cannot challenge its validity, and that, in any event, it isimprobable that after such guarantee has been given, the Secretary of State forIndia in Council will repudiate the same, should occasion arise to enforce it.It was further contended that the Court need not ascertain whether there hasbeen strict compliance with the provisions of Section 40 of the Government ofIndia Act, 1858, and that the guarantee is not beyond the scope of theauthority conferred upon the Secretary of State for India in Council by theCrown under that Statute. It is necessary to consider, in the first place, thepreliminary points urged by the learned Advocate-General. The first of thesecontentions in bar is that a Municipal Court has no jurisdiction to investigatethe validity of the guarantee, because this was an act of State. It is not easyto follow how, when the Secretary of State for India in Council chooses to givea guarantee for the due performance of a decree obtained by one privateindividual A. against another private individual B., the act can beappropriately designated as a Sovereign Act. As Lord Justice Fletcher Moultonobserved in Salaman v. Secretary of State (1906) 1 K.B. 613 : 75 L.J.K.B. 418 :94 L.T. 858 an act of State is essentially an exercise of Sovereign power, andbecause it is an exercise of Sovereign power it cannot be challenged,controlled, or interfered with by Municipal Courts; but if an act is relied onas being an act of State and as thus affording an answer to claims made by asubject, the Courts must decide whether it was in truth an act of State andwhat was its nature and extent. The true view of an act of State appears,observed the same learned Judge, to be that it is a catastrophic change,constituting a new departure. Municipal law has nothing to do with the act ofchange by which this new departure is effected. Its duty is simply to acceptthe new departure. But although this be so, the principles of interpretationapplicable to an act of State are not necessarily the same as those which applyto other Courts. For instance, if an act of State be expressed in a documentpurporting to confer benefits upon an individual, it by no means necessarilyfollows that there is any intention to create a contract or that the documentshould be construed by the same canons of interpretation as would be adopted inthe case of a contract between two individuals. If this be the true view of thenature of an act of State, it is not easy to appreciate how the offer of aguarantee by the Secretary of State for India in Council can be appropriatelydesignated as an act of Sovereign power. But if that were its true character,and if for that reason the Municipal Courts are deprived of all jurisdiction inrespect of the matter, the decree-holder-respondent would be justly entitled tomaintain the position that a guarantee of this character ought not to beaccepted for purposes of stay of execution. In my opinion, the true view of thesituation is that when the Secretary of State for India in Council offers aguarantee for the due performance by the appellants of any decree that might bemade against them and in favour of the decree-holder respondent, the MunicipalCourts have not only jurisdiction but it is their duty to determine, wheninvited by the party against whom an order for stay is sought, to do so,whether the guarantee is valid and would be enforceable if the occasion arosefor its enforcement.

10. The argument upon the second point in bar falls into twobranches. It is first suggested that the Court ought to refrain from an inquiryinto the validity of the guarantee, because once the guarantee has been given,it would not be open to the Secretary of State for India in Council to questionits validity. It is suggested in the second place, that it is not likely thatafter the guarantee has been given, the Secretary of State for India in Councilwould repudiate it, if occasion arose for its enforcement. In so far as thefirst branch of this contention is concerned, I am unable to uphold it aswell-founded. As pointed out in the Laws of England edited by Lord Halsbury,Volume 13, Section 537, a party cannot by representation any more than by othermeans raise against him an estoppel so as to create a state of things which heis under a legal disability not to do. No person can by his conduct orotherwise waive or renounce a right to perform a public duty or estop himselffrom insisting that it is his right to do so. The doctrine has been frequentlyapplied to cases of corporate bodies, and it has been ruled that a corporatebody cannot be estopped from denying that they have entered into a contractwhich it was ultra vires for them to make; no corporate body can be bound by anestoppel to do something beyond its powers or to refrain form doing what is itsduty. For illustrations reference may be made to Fairtitle v. Gilbert (1787) 2T.E. 168 : 1 R.R. 455; Attorney-General v. Dublin Corporation (1841) D W 545;Ashbury v. Riche (1875) 7 H.L. 653; Grant v. Secretary of State for India(1877) 2 C.P.D. 445 : 46 L.J.C.P. 681 : 37 L.T. 188 : 25 W.R. 848; MacAllisterv. Bishop of Rochester (1880) 5 C.P.D. 194 : 49 L.J.C.P. 443 : 42 L.T. 481 : 28W.E. 584; Dunn v. Queen (1896) 1 Q.B. 116 ; Great North Western Central RailwayCompany v. Charlebois (1899) A.C. 114 : 68 L.J.P.C. 25 : 79 L.T. 35; IslingtonVestry v. Hornsey Urban District Council (1900) 1 Ch. 695 : 63 J.P. 488 : 80L.T. 746. It may be observed here incidentally that Section 5 of the Governmentof India Act, 1859, to which reference was made by the learnedAdvocate-General, is of no real assistance, because if a contract is ultravires, no liability under such a contract is imposed upon the Secretary of Statein Council and none can consequently pass to his successors. It was furthersuggested, however, by the learned Advocate-General that this principle isrestricted in its application to corporation strictly so called, and that itdoes not apply to the Secretary of State for India in Council. The distinctionsuggested is, in my opinion, without any foundation. As was observed by LordEsher, M.R. in Dunn v. Queen (1896) 1 Q.B. 116 , if any authority representingthe Crown were to make a contract so as to derogate from the powers of theCrown, the contract could not be enforced against the Crown. It is well-settledthat the effect of the doctrine of equitable estoppel does not apply to theGovernment in the case of unauthorised acts or omissions on the part of itsOfficers and agents, nor, are public Officers concluded by acts done in theirofficial capacity. The principle is perfectly intelligible that thoughindividuals may be estopped by the unauthorized acts of their agents apparentlywithin the scope of their agency. The Sovereign power ought not to be bound bythe ultra vires acts of its agents see Filor v. United States (1869) 9 Wall 45.Now what is the position of the Secretary of State for India in Council Thepowers and duties of the Secretary of State for India in Council are defined byStatute, and the Secretary of State for India in Council is not competent toact in excess of the authority delegated to him by the Crown. As Lord JusticeJames observed in Kinloch v. Secretary of State for India in Council (1880) 15Ch. D. 1 , if we look at the Government of India Act of 1858, which put an endto the East, India Company, all the property and assets of the East IndiaCompany were not transferred to any body corporate which were successors to theEast India Company, but were vested in the Crown in trust for the Government ofIndia and the words "the Secretary of State for India in Council"which are mere words providing that that Officer and department would becapable of suing and being sued, are nothing more than words indicating themode by which the Government of India is to sue and be sued, that is to say,the mode in which the Indian Exchequer might itself institute proceedings andmight be made the subject of proceedings for the purpose of determining therights between any of Her Majestys subjects. Lord Justice James added thatthere was no such person in truth as the Secretary of State for India inCouncil, and there was no such body known except as a name for suing and beingsued on behalf of the Indian Exchequer. This decision of the Court of Appealwas taken on appeal to the House of Lords Kinloch v. Secretary of State forIndia in Council (1882) 7 App. Cas. 619 : 51 L.J. Ch. 885 : 47 L.T. 133 : 30W.R. 845, and was ultimately affirmed. In my opinion there is no room forreasonable doubt that the powers and obligations of the Secretary of State forIndia in Council are defined by the Statute, and that if he exceeds theauthority delegated to him, the holder of the office for the time being when suedin a Municipal Court is entitled to urge by way of defence the ultra virescharacter of the transaction. In this view of the answer which ought to begiven to the first branch of the argument, it is not necessary to dealseriously with the second branch that the Court ought to refrain from aninquiry into the validity of the guarantee, because it is improbable that itsvalidity will ever be questioned on behalf of the Secretary of State for Indiain Council. Instances are not unknown in which when an attempt has been made toenforce agreements alleged to have been entered into by High Officers ofStated, their validity has been successfully impeached by the Secretary ofState for India in Council on the ground that the arguments were ultra vires.King v. Secretary of State 13 C.L.J. 357 : 9 Ind. Cas. 858 [LQ/CalHC/1910/64] ; Sarat Chandra Dasv. Secretary of State 13 C.L.J. 360 : 9 Ind. Cas. 859 see also Shivabhajan v.Secretary of State 28 B. 314 and Municipal Corporation of Bombay v. Secretaryof State 29 P. 580 : 7 Bom. L.R. 27. In any event, if the guarantee isunenforceable in a Municipal Court the decree-holder cannot legitimately beasked to accept it on the assumption that its validity is not likely to bechallenged if occasion arises for its enforcement. In my opinion, the groundssuggested why the Court should refrain from an inquiry into the question of thevalidity of the guarantee offered are wholly unsubstantial, and the Court wouldfail in its obvious duty if a security were accepted without question, when itis fairly obvious that grave complications might result if occasion arose forthe enforcement of the security. I must now proceed to examine the groundsurged by the learned Counsel for the decree-holder in support of his contentionthat the guarantee offered ought not to be accepted for stay of execution ofthe decree against the judgment-debtors.

11. The first objection taken by the learned Counsel for thedecree-holder is that the security offered is not shown to have been sanctionedby the Secretary of State for India in Council with the concurrence of amajority of votes at a meeting. This, in my opinion, is a valid objection. Thepowers of the Secretary of State for India in Council are, as I have alreadystated, defined by the Statute, and strict compliance with its provisions isessential. Section 40 of the Government of India Act, 1858, lays down,--I quoteonly so much of the section as is necessary for the present purpose that theSecretary of State in Council with the concurrence of a majority of votes at ameeting shall have full power to enter into any contracts whatsoever as may bethought fit for the purposes of the Act. I need not repeat that the learnedAdvocate-General at one stage declined to give any information on the subject,but subsequently placed before us a communication that had passed between HisMajestys Secretary of State and His Excellency the Viceroy. The terms of thetelegram, however, are not explicit and the learned Advocate-General was unableto furnish to the Court precise information upon this fundamental point. In theevents which have happened, I must decline to act upon the assumption that theSecretary of State in Council with the concurrence of a majority of votes at ameeting, proposes to give this guarantee. The Secretary of State for India inCouncil is not a party to the suit or to the decree under appeal nor is he aparty to these proceedings for stay of execution, and if a security is offeredon his behalf for the benefit of the judgment-debtors, the decree-holder andthe Court are plainly entitled to have definite information that the provisionsof the Statute have been strictly complied with. Such information has not beengiven and, therefore, the first objection taken by the learned Counsel for thedecree-holder has not been successfully met.

12. The second objection taken by the learned Counsel forthe decree-holder is that the security offered is ultra vires. Here the learnedCounsel based his contention upon two grounds, namely, first, that underSection 40 of the Government of India Act, 1858, the Secretary of State forIndia in Council may enter into any contract for the purposes of the Act, thatis for the purposes of the Government of India alone, as mentioned in Section 2of the Statute: secondly, that under Sections 39, 40, 41, 42 and 65 of theStatute, only such liabilities undertaken by the Secretary of State for Indiain Council may be enforced against the revenues of India, as might have beenenforced against the East India Company, if the liabilities had been lawfullycontracted and incurred by the said Company, and the revenues of India shallnot be applied to any other purpose whatsoever. The learned Counsel for thedecree-holder contended that, tested from each of these points of view, theguarantee offered on behalf of the Secretary of State for India in Council isultra vires and unenforceable in law. In answer to these contentions, thelearned Advocate-General argued that the guarantee offered was for the purposesof the Government of India within the meaning of Section 2 of the Government ofIndia Act, 1858, because, on the principle recognised in the cases of Wellesleyv. Beaufort (1827) 2 Rule 1 ; In re: Spence (1847) 2 Phill 247 : 16 L.J. Ch.300 : 11 Jur. 399 and Queen v. Gyngall (1893) 2 Q.B. 232 : 62 L.J. Q.B. 559 : 4R. 448 : 69 L.T. 481 : 57 J.P. 773 it is the duty of the Crown to protectinfants, the doctrine which is the foundation of the Statutory provisionsembodied in the Court of Wards Act, 1879. The learned Advocate-General furthercontended that the powers of the Secretary of State for India in Council todeal with the revenues of India were wider than those possessed by the EastIndia Company, and that the judicial decisions upon which reliance is placed onbehalf of the decree-holder, namely P. and Order Steam Navigation Company v.Secretary of State (1861) 2 Bou166; Nobin Chunder v. Secretary of State 1 C. 11: 24 W.K. 309; Secretary of State v. Hari Bhanji 5 M. 273 and Shivabhajan v.Secretary of State 28 B. 314 are clearly distinguishable. Reference was also madein this connection to Sections 1, 2 and 5 of the Government of India Act, 1859(Statute 22 and 23 Vic. Chapter 40). Now, in so far as the first reasonassigned by the learned Counsel for the decree-holder is concerned, it lies ina very narrow compass. It cannot be seriously disputed that for the validity ofa contract entered into by the Secretary of State for India in Council underSection 40 of the Government of India Act, 1358, it is an essentialpre-requisite that the contract should be for the purposes of the Act; and itmay be observed that the same remarks apply to contracts entered into by theGovernor-General in Council and the other statutory bodies mentioned in Section1 of the Government of India Act, 1859, in exercise of the authority delegatedto them thereby. Now the expression "for the purposes of the Act" or"for the purposes of the Government of India means, as was pointed out bySir Lawrence Jenkins, C.J., in Shivbhajan v. Secretary of State 28 B. 314"the superintendence, direction and control of the country."Consequently, if a question arises, whether a particular contract may berightly described as made for the purposes of the Government of India, theanswer must depend upon its scope and character. Now in the case before us,what is the scope and character of the guarantee offered on behalf of theSecretary of State for India in Council The Secretary of State for India inCouncil covenants that the defendants in the suit shall duly act in accordancewith the decree of this Court and shall pay whatever may be payable by themthereunder, and if they should fail therein, the Secretary of State for Indiain Council will be liable to pay the same. If, therefore, we look to theessence of the matter, it reduces to this. The Court of Wards is entitled,under the Statutory powers, to take charge of the property of an infant who hasbeen adjudged a Ward of the Court. The Officers of the Court of Wards takepossession of an estate which does not belong to the infant who has beendeclared a Ward of the Court. The officers keep out of possession the rightfulowner who after protracted litigation successfully asserts and establishes histitle in the ultimate Court of Appeal. Meanwhile, the Officers of the Court ofWards continue in possession of the estate and spend the income on theassumption that it belongs to the Ward of the Court. The Court of Appeal notonly makes a decree for possession in favour of the successful owner, but alsodirects the defendants in the suit to account for the profits they haveunlawfully spent. The Secretary of State for India in Council undertakes to payout of the revenues of India the sums unlawfully spent by the defendants out ofthe estate which is finally adjudged never to have belonged to the infant. Thequestion is, is a security given for this purpose by the Secretary of State forIndia in Council, an engagement made for the purposes of the Government ofIndia Upon the arguments addressed to us by the learned Advocate-General, I amnot convinced that a contract of this character can be appropriately describedas a contract for the purposes of the Government of India. I cannot appreciatehow the case is strengthened by a reference to the familiar doctrine thatinfants are entitled, in respect of their person and property, to the,protection of the State, In the case before us, if the decision of the Courtbelow is ultimately affirmed in substance--and that is the contingency in whichoccasion will arise for the fulfillment of the obligation offered to be undertakenby the Secretary of State for India in Council the position will be that theinfant defendant had no property at all, that there was never any question ofprotection of such property, and that the Officers of the Court of Wardsunlawfully took possession of the estate of which the plaintiff has beenadjudged to be the rightful owner and spent the income of his estate on theassumption that it could be rightly applied for the benefit of the infant.After the most anxious and careful consideration I have been able to bestow onthe matter, I am not prepared to uphold the position that a contract of thisdescription falls within the scope of Section 40 of the Government of IndiaAct, 1858. In the second place, in so far as the other reason urged by the learnedCounsel for the decree-holder in support of his contention that the guaranteeis ultra vires, is concerned, it opens up a question of much wider scope thanwhat is essential for the purposes of the case before us. The learned Counselhas contended broadly that if occasion arises for the enforcement of thesecurity and an objection is taken as to its validity, the test to be appliedwill be, whether the security would have been valid if it had been given by theEast India Company, and that tested from this point of view, the security oughtto be pronounced unenforceable. I reserve my opinion upon the question raised,because apart from the circumstance that its decision is not necessary for ourpresent purposes, the judicial pronouncements which relate to the liability ofthe Secretary of State for non-contractual obligations and upon which relianceis placed, are by no means uniform, while the question of the extent of thepowers of the East India Company is necessarily not altogether free from doubtand difficulty. I, therefore, prefer to rest my decision upon the groundsalready explained. I may add that objection was also taken as to the form ofthe security and the proper mode of its execution; these are obviouslyquestions of minor importance, and if it was necessary to do so, the difficultysuggested might no doubt have been removed.

13. I may add that at one stage of the arguments, referencewas made to Section 1 of the Government of India Act, 1859, and we were invitedto accept the security as given by the Government of India alone. Here also,the applicants are in a difficulty, because no information was given to us bythe learned Advocate-General as to the elements which have to be considered,before a contract under that section can be pronounced valid. In addition tothis, there is the difficulty that any contract entered into by the Governmentof India must, in order that it may be valid, be for the purposes of theStatute.

14. Besides the considerations mentioned, there are, in myopinion, two other points which must carry weight in the decision of thismatter. In the first place, it is the well settled practice of this Court thatwhen security is offered for stay of execution, it is not accepted unless itslegal validity is reasonably free from doubt. It is perfectly true thatsecurity has to be furnished to the satisfaction of the Court. But, when theCourt accepts a security, it does so for the possible benefit of thedecree-holder, and it would, in my opinion, be obviously unreasonable to accepta security the validity of which is by no means free from doubt and theenforcement of which may lead to protracted litigation, In the second place,Section 745 of the Civil Procedure Code of 1908, lays down that where anyperson has become liable as surety for the performance of any decree or anypart thereof or for the payment of any money or for the fulfillment of anycondition imposed on any person under an order of the Court in any suit or inany proceeding consequent thereon, the decree or order may be executed againsthim, to the extent to which he has rendered himself personally liable in themanner herein provided for the execution of decrees and such person shall, forthe purposes of appeal, be deemed a party within the meaning of Section 47. Inthe case before us, the Secretary of State for India in Council does not makehimself personally liable nor is any specific property hypothecated.Consequently, if the security is accepted and occasion arises for itsenforcement, Section 145 might be deemed inapplicable, with the result that thedecree-holder might be driven to an expensive and protracted regular suit toenforce the security. In my opinion, it would be unreasonable to place thedecree-holder in a position of such embarrassment. It may be observed hereincidentally that under Section 145 the surety who has rendered himselfpersonally liable is treated as a party within the meaning of Section 47 onlyfor one specified and limited purpose, namely, for the purpose of appeal. Inother words, if execution is taken out against the surety who has renderedhimself personally liable and an order is made against him, the order may betreated under Section 47, as one between the parties to the suit andconsequently appealable. But the surety who has rendered himself personallyliable is not to be deemed a party for any other purposes; consequently, in thecase before us, even if we were to hold that the security offered was valid inlaw, that would not amount to an adjudication between the decree-holder and theSecretary of State for India in Council, so as to bar a determination of thequestion if it should be raised in, a suit brought for the enforcement of thesecurity.

15. In my opinion, for the reasons stated, the applicationfor stay of execution ought to be refused, but I desire it to be distinctlyunder stood that if the decree-holder applies to execute the decree the Courtwill require security from him under Rule 6 of Order XLI of the Code as he hashimself, through his learned Counsel, offered to furnish. It is to be observedfurther that this matter has been argued before us only as regards theexecution of the decree for delivery of possession, and the present decisionrelates to that point only. If the decree-holder should apply for execution asregards costs or for an inquiry into the mesne profits, it will be open to theappellants to apply to this Court again for stay in respect of those twomatters. The rule must, therefore, be discharged with costs 15 gold mohurs.

William Teunon, J.

16. The suit out of which the present application arises isone brought to recover possession, with mesne profits of the estate known asDumraon Raj, on establishment of title. It appears that the last Maharajah ofDumraon, Sir Radha Prosad Singh Bahadur, died on the 5th of May 1894. Beforehis death he had executed a Will by which he devised the Raj to the MaharaniBeni Prosad Koeri for the term of her natural life and also authorised her toadopt unto him a son. The Maharani died on the 13th of December 1907 and theallegations of the defendants are that on the day preceding her death she hadtaken in adoption the 1st defendant, previously known as Jung Bahadur andthereafter known as Mahraj Kummar Srinivasa Prosad Singh, and that since herdeath the Court of Wards has been in charge of the properties on this minordefendants behalf. The plaintiffs allegations, inter alia, are that noadoption in fact took place, and that he, as the heir-at-law, is entitled tosucceed to the properties.

17. The suit having been decreed in plaintiffs favour theminor defendant and the Collector of Shahabad, who was impleaded asrepresenting the Court of Wards, have appealed to this Court and have also madethe present application under Order XLI, Rule 5 of the Code of Civil Procedure,1908, for stay of execution. By the decree the Court of Wards has been madeliable for mesne profits and costs, but at the hearing of this rule nothing hasbeen said with regard to this part of the decree and the application has,therefore, been treated and may be considered as one made for stay of executiononly in so far as delivery of possession is concerned.

18. In view of the terms of Order XLI, Rule 5, the facts ofthis case, and the contentions of the parties, the questions that arise fordetermination are two, namely (1) whether if the order for stay be not madesubstantial loss may result to the minor appellant and (2) whether the securityoffered by him is such as should be accepted.

19. On the first question the materials before us consist oftwo affidavits sworn in support of the petition, one on the 7th September andone on the 13th December and two affidavits in reply thereto sworn by theplaintiff respondent on the 1st and 19th December. Exception has been taken tothe acceptance of the supplementary affidavit filed on behalf of thepetitioners on the 15th December and it would doubtless have been made inaccordance with the rules of practice had the details given in the secondaffidavit been set out at length in the first. But the plaintiff-respondent hashad a full opportunity of answering the second or supplementary affidavit, andas all four affidavits have been placed before us we may with propriety decideon the materials thus furnished.

20. In his affidavits the plaintiff impeaches the managementand expenditure of the Court of Wards, but his allegations or suggestionsappear to be founded mainly on some misconception of the figures and statementscontained in the official reports to which he refers. This much at least appearsto be clear, that the administration of the estate by the Court has been moreefficient and more economical than the management of the late Maharani and inall probability would have been even more successful but for the existence ofthe dispute which has given rise to the present litigation. In any case, I canfind no reason to suppose that if the estates be handed over to the plaintiffhis management will be as beneficial to the minor defendant as the managementof the Court of Wards. From the second or supplementary affidavit filed onbehalf of the defendant, we find that survey and settlement proceedings underthe Bengal Tenancy Act are in progress in some 900 villages, and that there aremany rent suits pending. It is essential that in these suits and proceedingsthe interests of the estate should be efficiently safeguarded, but apart fromthese details, to my mind that a temporary transfer of possession in the caseof an extensive property such as the one now in question will dislocate themanagement and in all probability cause grave loss to the minor defendant ifeventually adjudged to be the true owner is a proposition which requires butlittle evidence in its support. No doubt, on behalf of the plaintiff-respondentit has been stated that when he seeks possession he will under Rule 6 of OrderXLI of the Code offer sufficient security for the restitution of the propertywith the rents and profits realised during the period for which he may remainin possession. But the ascertainment of these mesne profits, I am of opinion,will necessarily be a matter of some time, expense and difficulty, and I amfurther unable to discard from consideration the very possible waste and injurywhich may result--should the estate, at this stage, be handed over to the plaintiff-respondentwho on his own showing in carrying on this litigation by means of borrowedcapital.

21. For these reasons, I am of opinion that it is of greatimportance that, if possible, possession should not be disturbed until thequestion of title involved in the suit is finally decided and I am satisfiedthat if execution be not stayed, substantial loss may result to the appellant.

22. This brings me to the second question, namely, whetherthe security offered by the applicants is such as should be accepted. Thesecurity offered is a guarantee or simple bond to be executed by the ChiefSecretary to the Government of Bengal for and on behalf of the LieutenantGovernor in Council acting for and on behalf of the Secretary of State forIndia in Council.

23. It is not disputed that the revenues of India will amplysuffice to meet any demands that may accrue under this bond, and it may beconceded, as urged by the learned Advocate-General, that the Government ofIndias guarantee would be readily accepted by any ordinarily prudent man ofbusiness. But the decree-holder, it appears, has been otherwise advised and onhis behalf it is contended that a bond of this nature is one which, if occasionarises, the Courts will hereafter be unable to enforce, and it is urged that,however improbable the repudiation by the Secretary of State of such a solemnundertaking may be, the decree-holder should not be required by the Court toaccept a security which if the occasion arises he may be unable to enforce bylegal proceedings.

24. I agree with my learned brother and generally for thereasons given by him that the opposition of the decree-holder to the acceptanceof the security makes it incumbent upon the Court to inquire whether the bondin question is valid in law and capable of enforcement in the Municipal Courts.Now, it seems reasonably clear that the bond under consideration can beenforced against the Secretary of State for the time being as a charge upon therevenues of India only if it is found to be within the scope of the authorityconferred upon the Secretary of State, the Governor-General in Council or theLocal Government by the Government of India Act, 1858, and the Government ofIndia Act, 1589, and is, moreover, entered into in compliance with the provisionsof the said Statutes.

25. The objections then taken to the bond on behalf of thedecree-holder are four in number, namely (1) that under the Government of IndiaAct, 1858, the power of the Secretary of State to deal with the revenues ofIndia is no wider than the power previously possessed by the East IndiaCompany, and that the proposed bond or contract is one which could not havebeen lawfully entered into by that Company were it now in existence, (2) thatthe proposed bond or contract is not one for the purposes of the administrationor Government of India within the meaning of Sections 2, 40 and 42 of the saidAct, (3) that if the bond be considered as one entered into by the Secretary ofState it has not been shown that he is acting with the concurrence of amajority of votes at a meeting of his Council as required by Section 40 of theAct, and (4) that if the bond or contract be considered as one entered into bythe Government of India or the Government of Bengal in exercise of the powersconferred by Section 1 of the Government of India Act, 1859, it has not beenshown that the contract does not contravene the restrictions which under thesame section the Secretary of State in Council is authorised to impose.

26. In support of the first objection learned Counsel forthe decree-holder relies upon Sections 39, 40 41, 42 and 65 of the Governmentof India Act, 1858, refers to the Government of India Act, 1833, cites thecases of Nabin Chundar v. Secretary of State 1 C. 11 : 24 W.K. 309; Secretaryof State v. Hari Bhanji 5 M. 273 and Siva Bhanjan v. Secretary of State 28 B.314 and also invites reference to the charters of the East India Company. I amof opinion that I need not discuss this objection at length for it appears tome to be reasonably clear that whatever may be the case with respect to otherrights and powers and liabilities arising otherwise than out of contract,Section 40 of the Statute does not in respect of contracts restrict theSecretary of State to the position previously held by the East India Companybut authorises him to enter into any contract whatsoever for the purposes ofthe Act, that is to say for the purposes of the Government of India by and inthe name of His Majesty. The effect of Sections 42 and 65 in this connectionthen appears to be that on all contracts entered into by the Secretary of Statein pursuance of Section 40 of the Act the Secretary of State for the time beingmay be sued and the debts arising out of such contracts become chargeable uponthe revenues of India.

27. In support of the second objection it is urged that aguarantee given for the due performance by a private person of a decree passedagainst him and in favour of another private person can in no sense be said tobe a contract made for the purposes of the Government of India.

28. But in the present case the principaldefendant-appellant is a minor, and it cannot be disputed that the protectionof the person and property of infant is one of the functions of every civilisedGovernment. Pending the decision of the ultimate Court of Appeal, Government,in my opinion, cannot be said to be wrong in acting on its belief that theestate belongs to the infant in possession. Moreover, the estate now inquestion, we are informed extends over some 800,000 acres and comprisesthousands of villages, and the case thus involves the interests of an enormousbody of tenantry. If, therefore, the Secretary of State or the Government ofIndia be of opinion that it is in the best interests of the administration thatpending the ultimate decision of the highest Court of Appeal present possessionover this vast area should be maintained it cannot, in my opinion, besuccessfully denied that the security offered in order to effect this object isbeing offered and the contract is being entered into for the purposes ofGovernment. For these reasons, I should overrule the 1st and 2nd objectionstaken by the decree-holder to the security under consideration.

29. I now come to the 3rd and 4th objections. Section 40 ofthe Government of India Act, 1858, requires that the Secretary of State shouldenter into contracts for the purposes of Government with the concurrence of amajority of votes at a meeting of his Council. The learned Advocate-General whoat our instance has appeared in this matter on behalf of Government has beenable to show us that the furnishing of security by the Government of Bengal hasbeen sanctioned by the Secretary of State but he has not found himself in aposition to say whether this sanction has been given with the concurrence of amajority of votes at a meeting of his Council.

30. Section 1 of the Government of India Act empowers theGovernment of India, and the Local Governments, within the limits of theirrespective Governments to enter into any contract whatsoever for the purposesof the Government of India Act, 1858, that is, as I have already stated, forthe purposes of the Government of India by and in the name of His Majesty. Atthe same time, the exercise of the power thus conferred is made subject to suchrestrictions as the Secretary of State in Council may from time to timeprescribe. In respect of contracts such restrictions it is conceivable may beeither in respect of their value or in respect of their kind or character. Thelearned Advocate-General has been unable to give the Court any informationregarding the restrictions, if any, which the Secretary of State has seen fitto impose. In the absence of informations on the points staffed, I must agreewith my learned brother in holding that the 3rd and 4th objections taken to thepreferred security by the decree-holder have not been successfully met and mustprevail.

31. It is further to be observed that having regard to thelanguage of Section 145 of the Code, the security under consideration, itappears fairly clear, may be enforced only by a regular suit.

32. In this state of the law the opinion entertained by mylearned brother on the 2nd objection of the decree-holder, and the fact thatany decision arrived at by us in these proceedings would apparently not bebinding upon the Secretary of State in a suit brought, should occasion arise,to enforce the security, afford additional reasons why I should not in thismatter of discretion differ from my learned brother. I, therefore, agree in dischargingthe rule.

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Srinibas Prosad Singh and Ors. vs. Kesho Prosad Singh(02.03.1911 - CALHC)